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Test whether the average patient should pay no more than $250.

An auditor reviewed 25 oral surgery insurance claims from a particular surgical office, determining that the mean out-of-pocket patient billing above the reimbursed amount was $275.66 with the standard deviation of $78.11. (a) At the 5 percent level of significance, does this sample prove a violation of the guideline that the average patient should pay no more than $250 out-of-pocket? Declare the hypotheses and decision rule (b) Is this a close decision?

Statistics and Probability, Statistics

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